In case you are wondering, the avatar for Progressive Economics is John Kenneth Galbraith. Two of his books are especially relevant considering recent financial turmoil: The Great Crash, 1929 describes the famous Wall Street melt down of stock prices and how markets progressively become decoupled from reality in a speculative boom. The book is also a platform for Galbraith’s insights into human behaviour when wealth is threatened. And in A Short History of Financial Euphoria, he traces financial bubbles through several centuries, and cautions that what currently seems to be “the next great thing” may not be that great and may have quite irrational factors promoting it. In this book, Galbraith claims that a common factor in financial bubbles is easy access to borrowed money for speculation.
As a product of the School of Oriental and African Studies in London and the University of Virginia, I will add my weight to the dialogue on progressive economics. Galbraith, as someone who understood economics not as a rigid field of models and equations but as a complex product of cultural and political milieu, serves as the gold standard of political economy analysis. In his mold, I will be taking a more comprehensive approach to economics by including socio-political factors as well as traditional economic analysis.
This will be where future posts on economics, especially economic development and globalization, will be located. A handful of previous posts under International Relations would have ideally been posted under Progressive Economics, specifically the most recent post on Property Rights As Growth Strategy.
See Also: Bailout Brackets, It’s all about the benjamins, Real Estate and Inequality, The financial crisis explained… by the Brits, How’s that for fundementals of our economy?, Hopefully, This Is Just The Beginning, Nick Rowe: What Caused the Financial Crisis?, Barry Ritholtz: What Caused the Financial Crisis?, Bubble Goes Pop, Street Cred during the Financial Crisis, and For Most Cities, Recession Has Arrived.
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This bailout is just one more example of the indivisible handjob stroking irresponsible CEOs and CFOs with billions so that they can run the American economy even further into the ground. So much for Keynesian economics. If the goal is to stimulate the economy, why not give the money directly to the American taxpayers? The government could do twice as much good for the economy by returning half as much money (as the bailout requires) directly to the hardworking American taxpayers. A bird in the hand is worth two in the bush administration.
But who in power is interested in bailing out the lower and middle class? Neither Republicans nor Democrats, so what is to be expected? They depend on the ‘contributions’ from the financial sector to fund their own livelihoods — it seems illogical to expect them to bite the hand that feeds them.